When you rent a car, the rental company will offer you rental insurance. For many renters, this is the smart choice. They may not own a car themselves, and are therefore not covered by an existing auto policy. However, if you are a policyholder, then your policy may extend to the car you rent. Here's what you need to know.
Understanding Coverage For Renters Policies
Depending on the structure of your car insurance, you may or may not have coverage for the rental car you choose to use temporarily.
- Most of the time, your existing coverage does carry over. If you're already covered for liability, comprehensive or medical coverage chances are the policy will carry over while you're driving your rental car. You'll want to call your insurance provider to make sure, but in more cases than not, you can expect to be protected.
- Personal belongings left in a rental car probably won't be covered by your existing car insurance policy. But they may be protected by your homeowners or renters policy. Just be sure to regularly update your inventory with photos and receipts.
- Full coverage for comprehensive and collision will usually carry over to a rental car, but it might not be a bad idea to opt-in to the rental company's policy. The concern here is that the rental company may actually charge you for the money they lose by not being able to rent the car out while it's being repaired.
When you own a car, auto insurance is mandatory, but this is not usually the case when renting. The company is required to carry insurance, as they're the ones who own the vehicles. But, you are not required to buy the coverage if the company offers it to you.
Still, you'll likely need to maintain your own auto liability insurance in the meantime, as nearly all states require drivers to buy insurance. If you don't own a car, then it's a good idea to spend the extra money for the insurer's coverage. But if you are already protected, there's often not much sense in buying the same protection twice. So, you're free to pick and choose whichever setup works for you.